The House Committee on Small Business held a zippy, sub-hour hearing Wednesday afternoon on the issues facing such online-based and horizontally networked companies as Etsy, TaskRabbit, Airbnb, Uber and Lending Club — the greatest significance of which is, likely, that it marks the first time the words “peer-to-peer business” ever appear in the Congressional Record.
That’s not to say nothing of substance was discussed. The panel, responsible for promoting, well, small business, dove into the question of whether the way government collects employment data is a poor match for the sorts of work a small but growing fraction of Americans perform today. New York Democrat Nydia Velázquez, for example, said that “It will be difficult, if not impossible, to capture their contribution in official employment statistics.” She was on the right track, Arun Sundararajan of NYU’s Stern School of Business affirmed: “One of the ramifications is that we may be not measuring the full extent to which the country is employed, because we tend to count employment in terms of whole jobs.” Lawmakers, he suggested, need to start thinking about the contributions of more fragmented toil to the economy.
The panel was promised that the peer-to-peer economy is especially worthy of their attention. One reason: These companies do something that the aughts’ tech “giants,” like Apple, Google and Facebook, have never done: Employ tons of people. Said Phillip Auerswald, associate professor of public policy at George Mason University, “By their very structure, peer-to-peer platforms scale-out success to reach tens of thousands, even hundreds of thousands of people with opportunities to create viable livelihoods for themselves.” That will become even more consequential, he explained, as these P2P companies continue their expansion into such tricky but enormous fields as energy, education and health care.
Of course, the question of how to regulate these new business models came up, too. On that, Sundararajan had some ideas. He advocated for a model of Self-Regulating Organizations, operating with some government oversight, similar to the way securities exchanges work with the Securities and Exchange Commission. And what, Sundararajan was asked, if that approach ends up being a freer hand than the way traditional, especially bricks-and-mortar, companies are treated? “If it turns out the lower regulations on those fronts are giving them business advantage,” he explained, “there’s nothing that’s preventing them from adding peer-to-peer, or a rental or sharing dimension. I fully expect that Walmart and Amazon will enter this space.”
If the hearing was lightly attended, it still reached the exact right audience. The whole point of the session was to introduce Congress to the notion that people use technology to engage in economic activity with other individuals, at scale. It worked. “I think this is a great hearing because I, for one, had not heard of ‘peer-to-peer,’” said Chris Collins, a western New York Republican. “We all know about Uber here in D.C.” — a bonus of the networked car company holding one of its major policy fights in the District — “but I had’t considered, you know, what 1000 Tools and Sidecar is [sic] doing. I’m intrigued by that.”
Then there was Rep. David Schweikert, who informed Alan Mond, CEO of the aforementioned Ann Arbor-based neighbor-to-neighbor tool-rental company, “I’m your new best customer.” He chopped at the air with his left hand for emphasis. “I own every tool you can imagine. I own tools, I have no idea what they actually do.” But, he said, he’s seeing things anew after Wednesday’s hearing.
“If I have to go and buy a $3,000 swaging machine that I’m only going to use for one project,” the Arizona Republican said, “I no longer need to do that.”
Here’s full video of the hearing:
Nancy Scola is a Washington, DC-based journalist whose work tends to focus on the intersections of technology, politics, and public policy. Shortly after returning from Havana she started as a tech reporter at POLITICO.